Part 2A of Form ADV: Firm Brochure. Packerland Brokerage Services, Inc. 432 Security Blvd. Green Bay, WI

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1 Part 2A of Form ADV: Firm Brochure Packerland Brokerage Services, Inc. 432 Security Blvd. Green Bay, WI Telephone: Web Address: March 29, 2017 This brochure provides information about the qualifications and business practices of Packerland Brokerage Services, Inc. If you have any questions about the contents of this brochure, please contact us at or The information in this brochure has not been approved or verified by the United States Securities and Exchange Commission or by any state securities authority. Registration with the SEC or with any state securities authority does not imply a certain level of skill or training. Additional information about Packerland Brokerage Services, Inc. also is available on the SEC s website at You can search this site by a unique identifying number, known as a CRD number. Our firm's CRD number is Packerland Firm Brochure 1

2 Item 2 Material Changes The material changes since the March 30, 2016 annual update include: Item 4: As a dually registered entity, we clarified our role that Packerland s registered investment adviser acts as a Solicitor and, on occasion, will recommend its clients to enter into an advisory agreement with third-party money managers who are also Registered Investment Advisers to manage their clients portfolio. We clarified that, as Solicitors, Packerland is compensated with a referral fee for such recommendations and acts as a fiduciary only with respect to the recommendation of third-party money managers and the selection of certain strategies offered by the third-party money manager, but not with respect to the holdings within the third party money managers. Item 4: Update for Amount of Managed Assets: as of December 31, 2016, we were actively managing $220,445,280 of clients' assets on a non-discretionary basis, plus $18,119,235 of clients' assets on a discretionary basis. While Packerland acts as a solicitor for some third-party money managers, it does not have any discretion over the investments contained in the portfolio of third-party money managers. Thus, the assets contained in the third-party money managers are not included in the assets under management at Packerland. Packerland Firm Brochure 2

3 Item 3 Table of Contents Page Item 1 Cover Page 1 Item 2 Material Changes 2 Item 3 Table of Contents 3 Item 4 Advisory Business 4 Item 5 Fees and Compensation 12 Item 6 Performance-Based Fees and Side-By-Side Management 17 Item 7 Types of Clients 18 Item 8 Methods of Analysis, Investment Strategies and Risk of Loss 18 Item 9 Disciplinary Information 21 Item 10 Other Financial Industry Activities and Affiliations 21 Item 11 Code of Ethics, Participation or Interest in Client Transactions and Personal Trading 23 Item 12 Brokerage Practices 25 Item 13 Review of Accounts 25 Item 14 Client Referrals and Other Compensation 28 Item 15 Custody 29 Item 16 Investment Discretion 29 Item 17 Voting Client Securities 30 Item 18 Financial Information 30 Packerland Firm Brochure 3

4 Item 4 About Us: Advisory Business Packerland Brokerage Services, Inc. ( Packerland ) is registered with the Securities and Exchange Commission ( SEC ) as a broker-dealer and as a registered investment adviser with its principal place of business located in Green Bay, Wisconsin. Its broker-dealer is a member of the Financial Industry Authority ( FINRA ) since its registration as a broker-dealer in Packerland became a registered investment adviser with the State of Wisconsin in 1997 and became an SEC-registered investment adviser in May, Since Packerland is dually registered with the SEC as both a broker-dealer and a registered investment adviser, a Packerland investment adviser representative (the Packerland representative ) may also be registered as a general sales representative (or a registered broker-dealer representative) with Packerland s broker-dealer. Therefore, Packerland s investment adviser representative may be able to offer clients both investment advisory and brokerage services. Clients should speak to their Packerland representative to understand the different types of services available through Packerland. This brochure describes the services offered through Packerland s registered investment adviser (the Packerland RIA ). Packerland is privately held with no shareholders (individuals and/or entities) controlling 25% or more of the company. Advisory Services: Packerland Brokerage Services, Inc. offers the following advisory services to our clients who have entered into a contract with Packerland for investment advisory services: FINANCIAL PLANNING We provide financial planning services. Financial planning is a comprehensive evaluation of a client s current and future financial state by using currently known variables to predict future cash flows, asset values and withdrawal plans. Through the financial planning process, all questions, information and analysis are considered as they impact and are impacted by the entire financial and life situation of the client. Clients purchasing this service receive a written report which provides the client with a detailed financial plan designed to assist the client achieve his or her financial goals and objectives. In general, the financial plan can address any or all of the following areas: PERSONAL: We review family records, budgeting, personal liability, estate information and financial goals. Packerland Firm Brochure 4

5 EDUCATION: We review Education Individual Retirement Accounts ( IRAs ), financial aid, state savings and 529 plans, grants and general assistance in preparing to meet dependent s continuing educational needs through development of an education plan. TAX & CASH FLOW: We analyze the client s income tax and spending and planning for past, current and future years then illustrate the impact of various investments on the client's current income tax and future tax liability. INVESTMENTS: We analyze investment alternatives and their effect on the client's portfolio. INSURANCE: We review existing policies to ensure proper coverage for life, health, disability, long-term care, liability, home and automobile. RETIREMENT: We analyze current strategies and investment plans to help the client achieve his or her retirement goals. ESTATE PLANNING, DEATH & DISABILITY: We assist the client in assessing and developing long-term strategies, including cash needs at death and income needs of surviving dependents, disability income, asset protection plans, nursing homes, Medicaid and elder law. BUSINESS PLANNING: We assist in the analysis of current and future business needs. We gather required information through in-depth personal interviews. Information gathered includes the client's current financial status, tax status, future goals, returns objectives and attitudes towards risk. We carefully review documents supplied by the client, which generally includes answers to a questionnaire completed by the client. Thereafter, we will typically prepare a written report (the Plan ). Should the client choose to implement the recommendations contained in the Plan, we suggest the client work closely with his or her attorney, accountant, insurance agent, stockbroker and/or other professionals. Implementation of the financial plan recommendations is entirely at the client's discretion. We also provide general non-securities advice on topics that may include tax and budgetary planning, estate planning and business planning. Generally speaking, your Packerland representative will not provide you with tax advice, leaving that to you and your tax accountant. Typically, the financial plan is presented to the client within six months of the contract date, provided that all information needed to prepare the financial plan has been promptly provided. Since Packerland s representatives are also registered representatives of Packerland s broker-dealer and may also be insurance agents/brokers of various insurance companies, recommendations made in the financial plans may be limited to only those products offered through companies with which they are associated. Consequently, other advisers may be able to provide the same or similar service with a wider offering of products without the presence of these conflicts of interest. INDIVIDUAL PORTFOLIO MANAGEMENT Our firm provides asset management of client funds based on the individual needs of the client. Through personal discussions in which goals and objectives based on the client's particular circumstances are Packerland Firm Brochure 5

6 established, we develop the client's personal investment strategy. We create and manage a portfolio based on that strategy. During our data-gathering process, we determine the client s individual objectives, time horizons, risk tolerance, and liquidity needs. As appropriate, we may also review and discuss a client s prior investment history, as well as family composition and background. We manage these advisory accounts on a discretionary or non-discretionary basis. Account supervision is guided by the client's stated objectives (i.e., preservation of capital, income, growth and income, growth, or speculation), as well as tax considerations provided by the Client or the Client s tax accountant. Clients may advise the Packerland IAR of reasonable restrictions on investing in certain securities, types of securities, or industry sectors, which the Packerland representative takes into consideration when making recommendations or making changes to the client s portfolio. Once the client's portfolio has been established, we review the portfolio on a regular basis, and if necessary, rebalance the portfolio on a regular basis, all in accordance with the client's individual needs and reasonable restrictions. We generally meet with our clients to conduct these reviews, based on the client s desire. We strived to have these meetings on at least an annual basis and more frequently if necessary to meet the client s objectives. Asset Advisory Account The Asset Advisory Account ( AAA ) is a wrap fee program sponsored by Packerland. This type of account acts like a simple brokerage account (mutual funds and/or securities are held at Hilltop Securities, Inc., our clearing firm). The AAA account is generally not discretionary in nature (unless otherwise indicated) and the Packerland representative will not make independent investment decisions without first consulting with client and obtaining agreement with the investment advice being provided. MODEL PORTFOLIO MANAGEMENT Our firm provides portfolio management services to clients using model asset allocation portfolios. Packerland provides investment advisory services to those clients desiring and suitable for a model asset allocation portfolio through the Premier Advisory Program ( Premier ), Advantage Program ( Advantage ), and Russell Strategies as described below. These three programs are considered wrap fee accounts (please see disclosures below for these types of investment options). Each model portfolio is designed to meet a particular investment goal. Through personal discussions with the client in which the client's goals and objectives are established, we initially determine whether the model portfolio is suitable to the client's circumstances. Once we confirm suitability, the portfolio is managed based on the portfolio's goal, rather than on each client's individual needs. The Premier and Advantage programs noted above will allow the Clients to advise the Packerland representative of reasonable restrictions on the types of investments to be held in their account, but it will be up to the client and the Packerland representative to review the account to ensure that the portfolio does not contain underlying securities that were to be restricted. The Russell Strategies program does not allow the client to identify any restrictions. If the Russell Strategies contains securities which would be subject to a client restriction, the client should not invest in the Russell Strategies program. Clients retain individual ownership of all securities. Packerland Firm Brochure 6

7 We manage these advisory accounts on a discretionary or non-discretionary basis. Account supervision is guided by the client's stated objectives (i.e., preservation of capital, income, growth and income, growth, or speculation), as well as tax considerations. Once the client's portfolio has been established, the Packerland representative will review the portfolio on a regular basis, and if necessary, rebalance the portfolio, in accordance with the client's individual needs. If it is a non-discretionary account, the Packerland representative shall obtain the approval of the client before any rebalancing takes place. Through personal discussions with the client in which the client's goals and objectives are established, we determine if the model portfolio is suitable to the client's circumstances. Once we determine the suitability of the portfolio, the portfolio is managed based on the portfolio's goal, rather than on each client's individual needs. As stated above and subject to the restrictions above, clients in certain of the model portfolio programs may have the opportunity to place reasonable restrictions on the types of investments to be held in their account, but it is up to the client and the Packerland representative to review the account with respect to such restrictions and to advise the specific program if certain securities have to be liquidated because of the restrictions. Clients retain individual ownership of all securities. To ensure that our initial determination of an appropriate portfolio remains suitable and that the account continues to be managed in a manner consistent with the client's financial circumstances, we will (i) regularly remind each of our client using the model portfolio management services that the client needs to advise his or her Packerland representative of any changes to the client's financial situation and investment objectives; (ii) contact each participating client, on a regular basis (generally annually unless the customer or circumstances dictate otherwise), to determine whether there have been any changes in the client's financial situation or investment objectives, and, if applicable, whether the client wishes to impose investment restrictions or modify existing restrictions; (iii) be reasonably available to consult with the client; and (iv) maintain client suitability information in each client's file. The model portfolio management services programs are: Premier Program The Premier Advisors ( Premier ) program is a wrap-fee program sponsored by Hilltop Securities, Inc. ( Hilltop ), Packerland s clearing firm, and administered through Envestnet Asset Management ("Platform Manager"). Premier is available through Hilltop and its investment adviser representatives ("IARs"). Hilltop may also allow one or more independent registered investment advisers and their investment adviser representatives ( Co-Advisers ) to offer the program to their advisory clients. The Premier Advisors program offers clients professional investment management services through Separately Managed Accounts (SMAs). These SMAs are an investment portfolio of stocks, exchange traded funds, mutual funds, bonds, cash, and other individual securities managed by a professional third-party money manager. As appropriate, we also review and discuss a client's prior investment history as well as family composition and background. All transactions are done on a non-discretionary basis. Packerland Firm Brochure 7

8 The Advantage Program The Advantage ( Advantage ) is a non-discretionary asset allocation program sponsored and administered by Hilltop and is available through Hilltop and its Investment Adviser Representatives. Hilltop may also allow one or more independent Registered Investment Advisers, like Packerland, ("Correspondents") and their Investment Adviser Representatives, like Packerland s representatives ( Correspondent IARs ) to offer Advantage to their investment advisory clients. In Advantage, Hilltop, its investment adviser representatives, Packerland and Packerland representatives, analyze and review each Client's individual financial situation and investment objectives to identify a set of mutual funds and exchange-traded funds that are approved products of Hilltop, which they believed to be appropriate for such Client. Each Client works with the Packerland representative to select appropriate investments and allocate program assets among various investments. The client is free at all times to accept or reject any recommendation, and the client has the sole authority with regard to implementation, acceptance or rejection or any recommendation or advice. Unless directed otherwise by the client, program assets will be automatically rebalanced by Hilltop. Russell Strategies The Program gives the client the opportunity to allocate assets among various mutual fund portfolios of the Russell Investment Company ( Russell ), an investment company registered with the SEC under the Investment Company Act of Russell determines the asset allocation and fund selection for the Russell Model Strategies. You may select a Strategy and appoint Hilltop to manage the portfolio on a discretionary basis. The service begins with a consultation between you and the Packerland representative to review your investment objectives, financial circumstances and risk tolerance. You are generally asked to complete a Client Profile/Questionnaire ( Client Profile ) to document the results of this assessment. After reviewing the results of the Client Profile, the Packerland representative will recommend a target allocation of Russell Funds. These allocations seek to appropriately balance your financial objectives with your risk tolerance as part of an investment strategy. You agree to immediately notify your Packerland representative of any change in your financial situation. For each model, Russell determines the strategy, including the underlying Russell Funds to be used for each strategy, the allocation of assets to each Russell Fund, and the investment advisory firms ( money managers ) responsible for managing the assets of each Russell Fund. Typically, no more frequently than annually, Russell will make changes to the Russell Funds underlying the strategies; however, on a regular basis, Russell may change the money managers for the Russell Funds and/or the allocation of assets of the Russell funds to the various money managers. At Hilltop s discretion, Hilltop will implement the changes proposed by Russell. The investment managers of the various Russell Funds may be terminated or replaced by Russell, in its sole discretion, generally due to changes in senior investment personnel and/or a deviation from the Packerland Firm Brochure 8

9 desired investment discipline, but could be replaced for any reason or no reason. Such changes to fund investments are made without prior notice to you. RETIREMENT PLAN SERVICES We offer Non-discretionary Investment Advisory Services, Discretionary Investment Management Services, and Administrative Services (each a form of Retirement Plan Services ) that are designed to assist plan sponsors of employee benefit plans ( Sponsor or Sponsors as the case may be). When providing any Non-discretionary Investment Advisory Service, we will solely be making investment recommendations to Sponsor, and Sponsor retains full discretionary authority or control over assets of the Plan. We agree to perform any Non-discretionary Investment Advisory Service to the Plan, as a fiduciary, as defined in ERISA Section 3(21)(A)(ii), and will act in good faith and with the degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. When providing any Discretionary Investment Management Service, we will be exercising discretionary authority or control over assets of the Plan. We will have full power and authority to select, monitor, remove and replace the investment options offered under the Plan; provided, however, we will not have any power or authority to direct the investment of Plan assets to any investment. We agree to perform any Discretionary Investment Management Service to the Plan as a fiduciary, as defined in ERISA Section 3(21)(A)(i), and will act in good faith and with the degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. In some cases, we may be performing Discretionary Investment Management Services to the Plan as a fiduciary under ERISA Section 3(38) and will act with the degree of diligence, care and skill that a prudent person rendering similar services would exercise under similar circumstances. In those case, this discretionary authority is specifically granted to us by the Plan Sponsor, as specified in the Retirement Agreement. When providing any Administrative Service, we may support the Sponsor with plan governance and committee education; vendor management and service provider selection and review; investment education; or provide plan participant non-fiduciary education services. We agree to perform any Administrative Service solely in a capacity that would not be considered a fiduciary under ERISA or any other applicable law. SOLICITOR SERVICES TO THIRD-PARTY MONEY MANAGERS Packerland also acts as a solicitor to various third-party money manager investment advisers, who are registered investment advisers with the SEC and who have entered into a Solicitors Agreement with Packerland (the SEC registered investment advisers who have entered into a Solicitors Agreement with Packerland are hereinafter referred to as third-party money managers ). Because it is dually registered as both a broker-dealer and a registered investment adviser, Packerland and its representatives may recommend, based on a client's individual circumstances, the client s suitability and needs (as discovered during the client's initial and on-going meetings) that the client engage a third-party money manager to act as the client s registered investment adviser to manage the client s portfolio. Packerland s representatives will disclose to the client that Packerland acts as a solicitor for these thirdparty money managers and will derive a solicitor s fee (sometimes referred to as a referral fee ) for Packerland Firm Brochure 9

10 referring the client to the third-party money manager. If the client agrees to the use of a third-party money manager, Packerland s representatives will perform searches of various third-party money managers that have entered into a Solicitors Agreement to determine which third-party money manger s portfolio management style is appropriate and suitable for the client. Factors considered in making this determination of suitability include account size, risk tolerance, the opinion of each client and the investment philosophy of the third-party money manager. Among other things, the Packerland representative will discuss the benefits of using the third-party money manager (utilizing the third-party money manager s brochure, Form ADV and other pertinent documents) and provide the clients with paperwork that showed the various strategies and different programs used by the third-party money manager, along with the fees charged by the third-party money manager. If the client is interested in the use of the third-party money manager to assist the client with the investments in the client s portfolio, the Packerland representative would ask the client to enter into an investment advisory agreement with the third-party money manager and disclose that, pursuant to the Solicitor s Agreement that Packerland has with the third-party money manager, Packerland and its representative would receive a referral fee from the third-party money manager, (which is generally a percentage of the total advisory fee paid to the third-party money manager by the client). Thus, the client is not paying Packerland any fee for recommending the use of a third-party money manager. Pursuant to the Solicitor s Agreement and disclosure, the Packerland representative would also provide the clients with a copy of the third-party money manager s Form ADV Part 2A and other documents mandated by the Investment Advisers Act of 1940, as amended. In addition to the above, the Packerland client is also obligated to acknowledge, via the client s signature, certain disclosures regarding the engagement of a third-party money manager as the registered investment adviser for the account. These disclosures include, but are not limited to: (i) the identity of the third-party money manager and the fact that the client must enter into the third-party money manager s investment advisory agreement; (ii) the fact that Packerland is acting as a Solicitor and will be paid a referral fee for recommending the client to the third-party money manager; (iii) the fact that, as Solicitor, Packerland is obligated to provide the client with certain disclosures pursuant to Rule 206(4)-3 of the Investment Advisers Act of 1940, as amended; (iv) the fact that as Solicitor, Packerland will NOT be acting as the registered investment adviser for the portfolio in these accounts and, as such, Packerland will render no investment advice with respect to the portfolio that will be managed by the third-party money manager; (v) certain fees associated with the third-party money management account, which may include investment account fees, annuity fees and/or third-party money management fees, but exclude other fees such as all fees, charges and commissions associated with a brokerage account (which may be payable to Packerland as the broker-dealer entering those transactions at the direction of the third-party money manager or the client), all fees and charges associated with the purchase or sale of mutual funds shares as disclosed in the prospectus (including, but not limited to, 12b-1 fees, contingent deferred sales charges and record keeping fees), custodian fees and any other fees deemed relevant; (vi) how the fees are to be paid to the third-party money manager and the consequences of certain actions with respect to direct payment from the account; and (vii) with respect to variable annuity accounts, the fact that client understands that certain issuers may also have asset allocation models available for no additional fees. Clients should refer to the third-party money manager's disclosure document for a full description of the services offered by the respective third-party money manager. Packerland Firm Brochure 10

11 Pursuant to the terms of the Solicitor s Agreement, Packerland and its representative will (i) fulfill the role of the Packerland representative (as Solicitor) and assist the client in determining the client s initial and ongoing suitability for the third-party money manager s investment portfolio; (ii) forward notices, directions and instructions from the client to the third-party money manager and (iii) describe the thirdparty money manager s services, but will render no investment advice on behalf of the third-party money manager. Because Packerland is prohibited from rendering any investment advice to accounts managed by the third-party money manager, Packerland advises its clients that, if the client engages the thirdparty money manager to provide advisory services to the client, then the third-party money manager is the registered investment adviser with respect to the portfolio it manages and not Packerland. Additionally, the client is required to sign an investment advisory agreement with the third-party money manager, establishing the investment advisory relationship. At the time of the referral to the third-party money manager, Packerland will ensure that all federal and/or state specific requirements governing solicitation activities of its registered representatives shall be met. Packerland does not represent that the third-party money managers and/or programs will provide the highest performance or the lowest cost in providing such services. While Packerland s broker-dealer has performed due diligence with respect to the third-party money managers that it recommends, Packerland makes no representation, express or implied, as to the quality of the services to be provided by any of the third-party money managers to any particular client. As discussed in Items 5 and 10 below, Packerland s and its representatives only recommend third-party money managers that pay Packerland a referral fee under a Solicitor s Agreement. Accordingly, there may be a financial incentive for Packerland and its registered representatives to recommend certain third-party money managers over others who do not pay Packerland a referral fee. Similarly, there may be other third-party money managers and/or programs that could provide similar services to the clients at a lower cost. Thus, Packerland and its representatives carefully discuss this with the client so that the client can make an informed decision on whether or not to engage the third-party money manager as the client s registered investment adviser. Accordingly, the client should review the fees associated with the client s use of a third-party money manager, in light of the services offered, to determine whether the client should utilize the services of the third-party money manager. ADVISORY SERVICES IN GENERAL For all services discussed above, our investment recommendations will generally include advice regarding the following securities: Exchange-listed securities Securities traded in the over-the-counter markets Warrants Corporate debt securities (other than commercial paper) Commercial paper Packerland Firm Brochure 11

12 Certificates of deposit Municipal securities Variable life insurance Variable annuities Mutual fund shares United States governmental securities Options contracts on securities Interests in partnerships investing in real estate Interests in partnerships investing in oil and gas interests Other alternative investments Because some types of investments involve certain additional degrees of risk, they will only be recommended and/or implemented if and only if they are consistent with the client's stated investment objectives, tolerance for risk, liquidity and suitability. Assets Under Management As of December 31, 2016, we were actively managing $220,445,280 of clients' assets on a nondiscretionary basis, plus $18,119,235 of clients' assets on a discretionary basis. Please note that Assets Under Management do not include any assets being managed by third-party money managers as the Registered Investment Adviser for certain Packerland clients. Item 5 Fees and Compensation Financial Planning Fees Packerland's Financial Planning fee is determined based on the nature of the services being provided and the complexity of each client s circumstances. All fees are fully disclosed to client in the terms of the agreement and are negotiated between the client and the Packerland representative. Once the fees are agreed upon, an agreement is entered into between Packerland and the client, which is subject to review and final approval by a principal of Packerland. Thus, all fees are agreed upon prior to entering into a contract with any client. Generally, our Financial Planning fees are calculated and charged on either (1) a fixed-fee basis, typically ranging from $500 to $10,000 depending on the specific arrangement reached with the client, Packerland Firm Brochure 12

13 (2) on an hourly basis ranging between $50.00 to $ depending on the complexity and nature of the scope of work, or (3) as a percentage of assets under management. We may request a retainer upon completion of our initial fact-finding session with the client; however, advance payment will never exceed $500 for work that will not be completed within six months unless federal statutes preempt the state blue sky laws. In that case, we will not require or solicit payment of fees in excess of $1, more than six months in advance of services rendered. The balance is due upon completion of the plan. Fees must be appropriate to the services provided. How fees are billed is dependent on factors such as: client's payment preference, adviser's level of expertise and experience and level of research required to achieve client's expectations of advice given. Fees for financial planning services may be waived based on transactions which also generate a commission to the Packerland representative (commissions may be generated from the purchase or sale of securities products when the transaction is processed through Packerland s broker-dealer). Fees may also be waived or reduced based on relevant reduced or absent activity in specified accounts. Fees for this service are generally billed in arrears on a quarterly basis but may be billed monthly, semiannually, annually, hourly, or on a one-time basis depending on the arrangement reached with the client. Commissions: Recommendations for the purchase or sale of securities investments which generate a commission to the adviser representative may be in addition to the fees set forth herein. Any portion of the fee may be reduced or waived based on a commission earned and the agreement, as negotiated between the client and Packerland. Portfolio Management Services Fees and Model Portfolio Management Fees Fees are billed as a percentage of assets under management for specified accounts under the terms of the client agreement. Accounts applicable to those terms are clearly identified including the name of various third-party providers (including, but not limited to, mutual funds, insurance companies, brokerage accounts, third-party money managers, etc.), account number(s), and initial account value. Billing is generally in advance on a quarterly basis and is demonstrated by supplying copies of applicable client statements to verify accurate billing based on the terms of the client agreement. As indicated in Item 4. above, the AAA, Premier, Advantage and Russell Strategies programs are wrap fee programs, which are described below. Specific fees will be set forth in the applicable client agreement. Solicitor Services to Third-party Money Manager Registered Investment Advisers Packerland and its representatives advise their clients desiring to use a third-party money manager that the clients are assessed a separate management fee by the third-party money manager and not assessed a fee by Packerland. This fee is generally set by the third-party money manager and not Packerland, but is fully disclosed by Packerland prior to the client s agreement to utilize such services. The fee charged by the third-party money manager is contained in the agreement entered into for registered investment advisory services between the client and the third-party money manager and is in addition to any other fees charged by the programs and investments recommended by the third-party money manager. For example, the account may be assessed: all fees, charges and commissions associated with a brokerage account (which may be payable to Packerland as the broker-dealer entering Packerland Firm Brochure 13

14 those transactions at the direction of the third-party money manager or the client); all fees and charges associated with the purchase or sale of mutual funds shares as disclosed in the prospectus (including, but not limited to, 12b-1 fees, contingent deferred sales charges and record keeping fees); custodian fees and any other fees deemed relevant; fees assessed by the variable annuity company; or fees of any other third-party service. Pursuant to the Solicitor s Agreement that Packerland has with these various third-party money managers that it recommends to suitable clients, Packerland and its representative would receive a fee (which is a percentage of the total advisory fee paid to the third-party money manager by the client) from the third-party money manager. This fee is fully disclosed to the client when they enter into the Investment Adviser Agreement with the third-party money manager and is contained in the Solicitors Disclosure Statement provided to the client. Moreover, the client is also obligated to confirm the client s receipt of certain disclosures with Packerland, which includes disclosure regarding the fees of the thirdparty money manager. Although Packerland and its representatives will recommend whether the services of a third-party money manager is the best program for the client, it is possible that the compensation received, directly or indirectly, by Packerland and its representative for recommending a third-party money manager may be more than the compensation Packerland or its representative would receive if they recommended another program. Consequently, Packerland and its representative may have a financial incentive to recommend a third-party money manager over other programs of services that might meet the clients needs at a lower cost (such as, mutual funds, ETFs, or fee-plus commission arrangements). That is why this recommendation is discussed carefully with the clients to obtain the clients consent and specific knowledge of the fees involved with these types of recommendations. Wrap Fee Programs and Separately Managed Account Fees: Clients participating in separately managed account programs, such as the individual portfolio management services program or the model portfolio management services may be charged various program fees in addition to the advisory fee charged by our firm. Such fees may include the investment advisory fees of the independent registered investment advisers, which may be charged as part of a wrap fee arrangement. In a wrap fee arrangement, clients pay a single fee for advisory, brokerage and custodial services. Client s portfolio transactions may be executed without commission charge in a wrap fee arrangement. In evaluating such an arrangement, the client should also consider that, depending upon the level of the wrap fee charged by the broker-dealer, the amount of portfolio activity in the client s account, and other factors, the wrap fee may or may not exceed the aggregate cost of such services if they were to be provided separately. We will review with clients any separate program fees that may be charged to clients. General Information Termination of the Advisory Relationship: A client agreement with Packerland s registered investment advisory firm may be canceled at any time, by either party, for any reason pursuant to the terms of the agreement, which generally provides for advance written notice. Upon termination of any Packerland Firm Brochure 14

15 account, any prepaid, unearned fees will be promptly refunded. Generally, the unearned fees are calculated on a pro rata basis according to the number of days remaining in the billing period. Mutual Fund Fees: All fees paid to Packerland for investment advisory services are separate and distinct from the fees and expenses charged by mutual funds and/or ETFs to their shareholders. These mutual fund fees are also separate and distinct from the fees charged by third-party money managers, who may have initially obtained the investment portfolio from Packerland s broker-dealer operation, but, who have obtained discretion, by virtue of the investment advisory agreement between the third-party money manager and the client, to invest in different mutual fund classes, including service class and/or investor classes. The mutual fund fees and expenses, including those assessed by the different classes, are described in each fund's prospectus. These fees will generally include a management fee, other fund expenses, and a possible distribution fee. If the fund also imposes sales charges, a client may pay an initial or deferred sales charge. A client could invest in a mutual fund directly, without our services or services of the third-party money manager. In that case, the client would not receive the services provided by our firm which are designed, among other things, to assist the client in determining which mutual fund or funds are most appropriate to each client's financial condition and objectives. Accordingly, the client should review both the fees charged by the funds and our fees to fully understand the total amount of fees to be paid by the client and to thereby evaluate the advisory services being provided. Additional Fees and Expenses: In addition to our advisory fees, clients are also responsible for the fees and expenses charged by custodians and imposed by broker-dealers, including, but not limited to, any transaction charges imposed by a broker-dealer with which an independent investment manager effects transactions for the client's account(s). Please refer to the "Brokerage Practices" section (Item 12) of this Form ADV for additional information. Various vendors, product providers, distributors and others may provide non-monetary compensation by providing training, education and publications that may further Packerland s employees skills and knowledge. Some vendors may occasionally provide Packerland with gifts, meals and entertainment of reasonable value consistent with industry rules and regulations. Packerland may, in accordance with its compliance policies, accept lodging or travel expenses from third parties or third party payment of its conference fee costs or fees to attain professional designations. The existence of these gifts, meals and entertainment provided by these vendors and others, which are consistent with industry rules and regulations and Packerland s Code of Ethics, may create a conflict of interest that could influence Packerland and its representative to use these vendors that may have higher costs or less favorable services than other suitable alternatives which do not provide equivalent compensation to Packerland or its representatives. Grandfathering of Minimum Account Requirements: Advisory clients are subject to Packerland's minimum account requirements and advisory fees which were in effect at the time the client entered into the advisory relationship. Therefore, our firm's minimum account requirements may differ among clients, depending upon when the clients entered into an advisory agreement with Packerland. Retirement Plan Services: Fees for Retirement Plan Services may be based on a percentage of plan assets, an hourly rate or a specified flat fee. The Fees may be paid by the Plan record keeper directly Packerland Firm Brochure 15

16 from Plan assets, accounts or investments. Alternatively, fees for Retirement Plan Services may be billed to the plan sponsor. Advisory Fees in General: Clients should note that similar advisory services may (or may not) be available from other registered (or unregistered) investment advisers for similar or lower fees. Limited Prepayment of Fees: Under no circumstances do we require or solicit payment of fees in excess of $500 more than six months in advance of services rendered, unless federal statutes preempt the state blue sky laws. In that case, we will not require or solicit payment of fees in excess of $1200 more than six months in advance of services rendered. Compensation: Certain Packerland representatives are dually registered with Packerland as both an investment adviser representative of Packerland RIA and a registered representative of the brokerdealer. Accordingly, Packerland will receive some or all of the Fees, ticket charges and/or the advisory service fee. Packerland will share this compensation with its representatives according to Packerland s agreement with its representatives. While Packerland representatives will recommend the best program for its clients, it is possible that the amount of compensation received, directly or indirectly, by Packerland and its representatives, as a result of recommending a wrap fee program, a third-party money management program or any other program, may be more than the amount of compensation Packerland and its representatives would receive if they recommended another investment program. Unless specifically excluded by the terms of the Investment Advisory Agreement, account balances in the money market funds are included as part of the account. Consequently, any asset-based fees owed under the Investment Advisory Agreement will be based, in part, on the balances in these investments. In addition, the custodian may serve as adviser, distributor, or administrator to the money market funds and receive compensation for those services. The money market funds may also pay shareholder servicing, shareholder communication, sub-accounting, and 12b-1 fees and charges to the Custodian, as well as fees for the execution of purchases of fund shares, or for trade clearance, settlement, custodial or other functions ancillary thereto. These fees and charges are expenses of the money market funds, which you will bear, indirectly, as a fund shareholder. Packerland s proportionate share of this compensation will increase as the aggregate balances in the money market funds or other depository products increase. Consequently, the possibility of this compensation creates an incentive for Packerland to make decisions for the account which would have the effect of increasing this compensation. Packerland and the Custodian are permitted to route client orders for over-the-counter and listed equity securities to selected market makers or market centers for execution. While they have an obligation to provide best execution services to you, you should note that both of these entities may receive compensation in the form of a per-share cash payment for directing order flow to these market makers or market centers. General Fee Practices: Transactions that have not settled prior to the last trading day of a calendar quarter may be included in either the current or the following calendar quarter, as determined by Packerland Firm Brochure 16

17 Packerland pursuant to its policies, procedures and practices. Fees are not charged on the basis of a share of capital gains or capital appreciation of the funds or any portion of the funds of an advisory client. Unless otherwise provided in the Advisory Agreement, Packerland will calculate the Fees on the basis of a 365-day year so that the amount payable each quarter will be based on the actual number of calendar days in that quarter. If you terminate your account prior to the end of any quarter, you will receive a pro-rated refund, if any, of advisory fees paid in advance. Unless otherwise limited by the Custodian or an agreement with other third-party registered investment advisers, such as Hilltop, Russell, a third-party money manager or a separate account program, and subject to usual and customary securities settlement procedures, you may make additions or withdrawals from your account at any time. No fee adjustment will be made for appreciation or depreciation in the value of any account during the fee calculation period. No refund or other adjustment of a fee already paid will be made as a result of a decline in value of the account (whether due to market losses or withdrawals); provided, in the event the Advisory Agreement is terminated within 5 days after its initial execution, all advisory fees will be refunded pursuant to the terms in the Advisory Agreement. You should note that, by signing the Advisory Agreement, you have directed the Custodian to pay the advisory fee as instructed by Packerland or any other third-party manager on a scheduled basis without any additional prior notice to you. All account assets, transactions, and advisory fees will be shown on the monthly or quarterly statements provided by the Custodian. Conflicts of Interest: As previously stated, some Packerland representatives are dually registered with Packerland. As a result, all of the programs offered by its representatives are conducted through Packerland s programs. Although Packerland and its representatives will recommend the best program for their clients, it is possible that the compensation received, directly or indirectly, by Packerland or its representatives for recommending a program may be more than the compensation Packerland or its representatives would receive if they recommended another program. Consequently, Packerland and its representatives may have a financial incentive to recommend a wrap program over other programs of services that might meet the needs of their clients at a lower cost (such as, mutual funds, ETFs, or feeplus commission arrangements). Please note that the amounts charged to the client s account for services, fees, expenses, or costs that Packerland has performed, incurred, advanced, or paid on the client s behalf (whether or not billed to the client, the account, or Packerland) will include a reasonable profit, unless prohibited under the Advisory Agreement or applicable laws, regulations, or rules. The existence of this profit may create a conflict of interest that could influence Packerland to recommend opening or maintaining accounts that may have higher costs or less favorable services than other suitable alternatives which do not provide equivalent compensation to Packerland or its representatives. Item 6 Performance-Based Fees and Side-By-Side Management Packerland does not charge performance-based fees. Packerland Firm Brochure 17

18 Item 7 Types of Clients Packerland provides advisory services to the following types of clients: individuals, including high net worth individuals; trusts, estates, corporations or other businesses; charitable organizations; and Sponsors or other fiduciaries to Retirement Plans. Item 8 Methods of Analysis, Investment Strategies and Risk of Loss METHODS OF ANALYSIS Packerland representatives may generally use any, some, all or none of the following methods of analysis in formulating our investment advice and/or managing client assets: Charting. In this type of technical analysis, we review charts of market and security activity in an attempt to identify when the market is moving up or down and to predict how long the trend may last and when that trend might reverse. Fundamental Analysis. We attempt to measure the intrinsic value of a security by looking at economic and financial factors (including the overall economy, industry conditions, and the financial condition and management of the company itself) to determine if the company is underpriced (indicating it may be a good time to buy) or overpriced (indicating it may be time to sell). Fundamental analysis does not attempt to anticipate market movements. This presents a potential risk, as the price of a security can move up or down along with the overall market regardless of the economic and financial factors considered in evaluating the stock. Technical Analysis. We analyze past market movements and apply that analysis to the present in an attempt to recognize recurring patterns of investor behavior and potentially predict future price movement. Technical analysis does not consider the underlying financial condition of a company. This presents a risk in that a poorly-managed or financially unsound company may underperform regardless of market movement. Cyclical Analysis. In this type of technical analysis, we measure the movements of a particular stock against the overall market in an attempt to predict the price movement of the security price or earnings per share, and predict changes to that data. A risk in using cyclical analysis is that the models used may be based on assumptions that prove to be incorrect. Qualitative Analysis. We subjectively evaluate non-quantifiable factors such as quality of management, labor relations, and strength of research and development factors not readily subject to measurement, and predict changes to share price based on that data. A risk is using qualitative analysis is that our subjective judgment may prove incorrect. Packerland Firm Brochure 18